March 18 (Bloomberg) -- Novo Nordisk A/S fell the most in
11 days in Copenhagen trading after JPMorgan Chase & Co. said
investors are underestimating the extent to which the world’s
largest maker of diabetes medicines is losing ground to rivals.

Novo fell as much as 1.9 percent, the most since March 7.
The stock retreated 1.5 percent to 984 kroner at 10:56 a.m. in
the Danish capital, with trading volume at 27 percent of the
three-month daily average. The stock underperformed the Stoxx
Health Care index of 35 companies, which lost 0.1 percent.

Last month, U.S. regulators rejected Novo’s Tresiba
insulin, marking a set setback for the Bagsvaerd, Denmark-based
company’s contest with Sanofi to dominate the diabetes market.
JPMorgan today cut its recommendation on Novo shares to
underweight from neutral, citing the rejection as well as
“limited commercial upside” for the use of Novo’s liraglutide
product as a treatment against obesity.

“Both these factors seem to be under-appreciated by the
market,” Richard Vosser, a JPMorgan analyst, said in a note.
“In fact, Novo’s recent share price rally suggests investors
remain in denial that Novo’s fundamentals have deteriorated.”

Novo’s share fell 13 percent on Feb. 11, the day after the
Tresiba rejection. Since then, the stock gained 7.6 percent
through last week’s close.

The share will probably drop by the third quarter, when
Novo will have released obesity data for its liraglutide
product, according to the JPMorgan analyst.

“We expect investors to reassess the risk reward of owning
Novo shares, with the likely conclusion, in our view, that they
should take profits,” Vosser said. “We’ve already reached that
conclusion and, hence downgrade to underweight.”